Negative amount = money you put in (a purchase or SIP instalment). Positive amount = money you got back (a redemption, dividend, or today's value). You need at least one of each.
Your money grew at 18.93% per year, accounting for the timing of each investment. You committed ₹50,000 across 5 dated flows and received ₹65,000, an absolute gain of ₹15,000 (30.00%). Because the rupees you added earlier compounded for longer than the ones you added last, XIRR is the honest single rate that ties every dated flow together.
| Date | Days from start | Cash flow | Discounted value |
|---|---|---|---|
| 2024-01-01 | 0 | -₹10,000 | -₹10,000 |
| 2024-04-01 | 91 | -₹10,000 | -₹9,577 |
| 2024-07-01 | 182 | -₹10,000 | -₹9,172 |
| 2024-10-01 | 274 | -₹10,000 | -₹8,780 |
| 2025-01-01 | 366 | -₹10,000 | -₹8,404 |
| 2026-01-01 | 731 | ₹65,000 | ₹45,933 |
| Sum of discounted values (target = ₹0) | -₹0 | ||
XIRR is the one annual rate at which every flow, discounted by its own number of days from the first date, cancels out to zero. The final row shows the sum landing on (near) ₹0, which is what "solved" means. Each day count is the actual gap from your earliest date, so a leap year or an odd-length month is handled exactly, not rounded to whole months.
Absolute return is just total profit over total outlay with no clock at all. A naive CAGR pretends your whole ₹50,000 arrived on the first date, so for a SIP it typically reads too low, because most instalments were invested for far less than the full span. XIRR fixes both by discounting each dated flow on its own timeline. When there is exactly one investment and one redemption, XIRR and CAGR agree to the decimal.